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When a foreign corporation named in an antitrust suit challenges afederal court’s personal jurisdiction over it, the court should look tothe company’s contacts with the United States as a whole, rather thanwith the specific forum in which the court sits, the 3rd U.S. CircuitCourt of Appeals has ruled. “A federal court’s personal jurisdiction may be assessed on the basis ofthe defendant’s national contacts when the plaintiff’s claim rests on afederal statute authorizing nationwideservice of process,” Senior U.S. Circuit Judge Max Rosenn wrote in a21-page decision in In Re: Automotive Refinishing Paint AntitrustLitigation. Writing for a unanimous three-judge panel, Rosenn rejected appeals fromtwo related German companies — BASF and BASF Coatings — thatchallenged not only the court’s jurisdiction over them, but also themethods used to conduct discovery on the jurisdictional questions. The decision upholds several rulings by U.S. District Judge R. BarclaySurrick who was assigned by the Multi-District Litigation Panel tohandle the 63 antitrust suits filed in five different states in the wakeof news in June 2001 that the Justice Department was probing the autopaint industry. Last year, Surrick granted final approval of an $18.7 million settlementby Akzo Nobel Car Refinishes, a subsidiary of Dutch chemical giant AkzoNobel NV. But the litigation continues against the BASF defendants andthree others — E.I. du Pont de Nemours & Co., Sherwin-Williams Co. andPPG Industries. The plaintiffs are a class of direct purchasers — mostly auto repairshops — who claim in the suit that the paint manufacturers conductedsecret meetings in Europe in which they agreed to “fix, raise, maintainand stabilize” the prices of refinishing paints. The suit alleges that during the 1990s, the price increases for autorefinishing paints continued to rise despite a drop in the prices ofcrude oil and natural gas — the principal raw materials used tomanufacture refinishing paints. BASF took an appeal after Surrick ruled in favor of the plaintiffs onjurisdictional and discovery issues. In the appeal, BASF’s lawyers — supported by amicus briefs from theGerman government and the German chamber of commerce — argued thatSurrick’s discovery rulings were flawed because he should have lookedfirst to the Hague Convention in deciding issues relating tojurisdictional discovery instead of applying the Federal Rules of CivilProcedure. The 3rd Circuit disagreed, finding that the U.S. Supreme Court rejecteda rule requiring “first resort” to the Hague Convention in its 1987decision in Societe Nationale Industrielle Aerospatiale v. U.S. DistrictCourt for the Southern District of Iowa. But in a short concurring opinion, two of the three judges said theyworried that ever since the Aerospatiale decision, “the Hague Conventionhas been given short shrift.” In the concurrence, U.S. Circuit Judge Jane R. Roth wrote: “I recognizethat we are bound by Aerospatiale, but I believe that it is time for theSupreme Court to revisit that decision — particularly because Iperceive that many of our courts have not exercised the ‘specialvigilance to protect foreign litigants’ that the Supreme Courtanticipated.” U.S. Circuit Judge Theodore A. McKee joined Roth’s concurring opinion. In Aerospatiale, the justices held that foreign discovery should beconducted via the Federal Rules of Civil Procedure unless the partyseeking application of the Hague Convention demonstrates that anexception should be made because of the particular facts of the case,the relevant sovereign interests and the likelihood that resort to theConvention will afford adequate discovery. BASF argued that the 3rd Circuit should carve out a narrow exception tothe Aerospatiale decision for cases in which personal jurisdiction hasyet to be established and the discovery sought is limited to proof ofjurisdiction. But plaintiffs’ lawyers argued in their brief that “nothing in the Aerospatiale rationale provides a basis for distinguishing meritsdiscovery from jurisdictional discovery.” Siding with the plaintiffs, Rosenn found that BASF’s argument waspremised on a “false dichotomy” between cases in which jurisdiction hasbeen established and those in which jurisdictional discovery is stillunderway. “The District Court indisputably has jurisdiction to determine whetherthere is personal jurisdiction upon completion of jurisdictionaldiscovery,” Rosenn wrote. As a result, Rosenn said, “the distinction … between ‘merits’discovery and ‘jurisdictional’ discovery, predicated on a falsedichotomy of having and not having jurisdiction, amounts to no realdifference because the court has jurisdiction for either type ofdiscovery.” BASF argued that Germany is a civil law country where the gathering ofevidence is a judicial function and that pursuing discovery withoutresort to the Hague Convention may be deemed an affront to Germany’ssovereignty. But Rosenn said the Aerospatiale court rejected a similar argument madeby a French defendant. “There is no reason to assume that discovery under the Federal Ruleswould inevitablyoffend Germany’s sovereign interest because presumably Germany, like theUnited States, would prohibit the alleged price-fixing conspiracy andwould welcome investigation of such antitrust violation to the fullestextent,” Rosenn wrote. Professor Geoffrey C. Hazard Jr. of the University of Pennsylvania LawSchool argued the appeal for the plaintiffs and was joined on the briefsby attorneys Howard I. Langer of Langer & Grogan; Gerald J. Rodos ofBarrack Rodos & Bacine; Warren Rubin of the Law Offices of Bernard M.Gross; and Joseph C. Kohn and Robert J. LaRocca of Kohn Swift & Graf. BASF’s appeal was argued by attorney Stephen Fishbein of Shearman &Sterling in New York who was joined on the brief by attorneys Edward W.Madeira Jr. and Matthew J. Hamilton of Pepper Hamilton in Philadelphia;and Raymond A. Just of Shearman & Sterling’s San Francisco office.The German government’s amicus brief was filed by attorney James J.Rodgers of Dilworth Paxson. The amicus brief for the Federation ofGerman Industries was filed by attorney William T. Hangley of HangleyAronchick Segal & Pudlin.

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